The Federal Housing Administration (FHA) has for a second time extended its foreclosure moratorium for properties in Puerto Rico and the U.S. Virgin Islands impacted by Hurricane Maria for an additional 60 days.
Under the expanded moratorium, the FHA is instructing lenders and servicers to suspend all foreclosure actions against insured borrowers in these presidentially declared major disaster areas until May 18, the agency says in a release.
In addition, the FHA has introduced a new option to help struggling borrowers impacted by Hurricane Maria and other 2017 disasters to resume their pre-disaster mortgage payments without payment shock.
The FHA’s new “Disaster Standalone Partial Claim” covers up to 12 months of missed mortgage payments via an interest-free second loan on the mortgage, payable only when the borrower sells the home or refinances their mortgage.
This new option requires no trial period or balloon payment and allows borrowers to keep their existing low interest rate and loan term, as well as their existing monthly mortgage payment.
In addition, the FHA’s expanded loss mitigation will streamline income documentation and other requirements to expedite relief to homeowners struggling to pay their mortgage while recovering from last year’s disasters.